Inflation in the United States rose more than expected during the month of August, according to newly released data in a government report published on Friday, September 16.
Americans were spared increases in food and energy, but they paid more for big ticket items like housing and healthcare, and they spent more to buy clothes and keep insurance.
In the headline monthly figure, consumer prices increased 0.2% after registering flat in July, the Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what consumers pay for everything from cars to tobacco.
"Inflation pressures are building gradually," Bloomberg News quoted Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida. "There’s really not much inflation in goods. Where we’re seeing price pressures is in rents and health care.
Media reports had economists forecasting an August CPI increase of 0.1%.
Overall, food prices were unchanged for a second month in a row and from a year earlier. Some food items have been consistently falling for months.
"The index for meats, poultry, fish, and eggs fell 0.4 percent in August, its twelfth decline in a row," the Labor Department’s report noted.
Gasoline prices eased last month by 0.9% following a 4.7% drop in June. As recently as April, they advanced 8.1% for their biggest increase since August 2012. Prices at the pump are 17.8% lower than a year ago.
For a more recent perspective, regular gasoline averaged $2.183 a gallon on Friday, according to AAA. That compares to their readings of $2.125 per gallon one month earlier and $2.308 per gallon one year earlier.
The broader index for energy, which combines items like gasoline, electricity and fuel oil, was unchanged for the month after falling 1.6% previously. Overall energy prices have declined 9.2% over the past 12 months.
Stripping volatile food and energy, so-called core consumer prices climbed 0.3% in August, their largest rise since February, and after an increase of 0.1% in July.
Motor vehicle insurance increased 0.5%. Health insurance costs climbed 1.1%. Medical care services jumped 0.9%, the most since November 1990.
"The hospital services index rose 1.7 percent, and the index for prescription drugs advanced 1.3 percent," the report also said.
U.S. inflation advanced by a rate of 1.1% over the past year after rising 0.8% in July, the lowest rate of inflation since the 12 months ended December.
In rounding out the Labor Department’s report, core U.S. inflation ran 2.3% quicker on an annual basis after moving at a 2.2% pace in the 12 months ended July. The core annual reading is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate.
"Overall, the August CPI report shows that domestic price pressures continue to build, but only very gradually," RTTNews.com quoted Steve Murphy, U.S. economist at Capital Economics. "The annual rate of core PCE inflation, which is the Fed’s preferred measure, has been stuck at 1.6% for most of this year," he added. "This suggests the Fed will likely wait until December before raising rates."
Inflation data below is for the last seven months through August, as published by the US Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on September 16, 2016. To get the data, the BLS monitors prices of consumer goods and services from around the nation. These prices are continually collected, analyzed and then summarized in monthly reports. The data offers the monthly and latest annual changes in percentages.
February to August 2016 Consumer Prices – Gains & Losses in Percent
|Feb 2016||Mar 2016||Apr 2016||May 2016||June 2016||July 2016||Aug 2016||12 Month|
|Food at home||0.2||-0.5||0.1||-0.5||-0.3||-0.2||-0.2||-1.9|
|Food away from home||0.1||0.2||0.2||0.2||0.2||0.2||0.2||2.8|
|Gasoline (all types)||-13.0||2.2||8.1||2.3||3.3||-4.7||-0.9||-17.8|
|Utility (piped) gas service||1.0||-0.7||0.6||1.7||-0.4||3.1||2.1||1.1|
|All items less food, energy||0.3||0.1||0.2||0.2||0.2||0.1||0.3||2.3|
|Commodities less food, energy||0.3||-0.2||-0.1||-0.2||-0.2||-0.1||0.1||-0.5|
|Used cars and trucks||0.2||-0.1||-0.3||-1.3||-1.1||-1.0||-0.6||-4.0|
|Services less energy||0.3||0.2||0.3||0.3||0.3||0.2||0.3||3.2|
The BLS tends to publish new inflation data around the middle of a month with consumer prices surveyed to the previous month. The Consumer Price Index (CPI) for September and the latest 12-month or annual period becomes public on October 18, 2016.
CPI data is used in calculating inflation rates and in this site’s calculator for inflation. The US Inflation Calculator on the homepage shows accumulated inflation and the change in buying power of the U.S. dollar over time.